According to Evan Shapiro, CEO of change agency ESHAP, the ascent of “lifestyle bundle” streamers such as Amazon and Apple TV+ has got experts talking about what that ultimately means for the future of the industry. The streaming services of these major companies have a built-in dynamism that strengthens their position in the marketplace over traditional platforms such as Netflix and Hulu because they offer subscribers much more than just streaming. Due to their deep pockets and market versatility, services such as Apple TV+ can afford to invest large amounts of money on “Apple Originals” without the same inherent concerns over churn that have recently impacted Netflix, and Amazon has also benefited from their vast resources with the ability to invest in award-winning original programming from Amazon Studios.
The emergence of Apple TV+ as a “prestige” platform to rival HBO Max has now been even further solidified with their recent major deal with Breaking Bad creator and Better Call Saul co-creator Vince Gilligan. After the recent conclusion of the award-winning Better Call Saul, there were multiple rounds of bidding from numerous streaming platforms for Gilligan’s next project, but it was Apple TV+ that landed the multimillion-dollar deal for what has been billed as “blended genre drama” starring Emmy-nominated Better Call Saul actor Rhea Seehorn. This deal cements Apple’s status as an award and critical darling with other acclaimed shows such as Ted Lasso, Severance, and Foundation, all despite still having one of the highest churn rates in the industry, at nearly 10.4%, per 2021 data published by research company Antenna.
“Apple winning the most sought-after series with a two-season straight-to-series order, demonstrates the new challenging paradigm for TV streamers,” Shapiro says. “Apple does not need to justify the cost of this show as a standalone profit & loss (P&L), but rather as part of a much larger already enormously profitable bundle of services and devices. The same can be said of Lord of The Rings and Amazon. Apple and Amazon can and will continue to bid up the rights for the most valuable IP, quite ironically, just as Netflix did at the height of their buying power. The difference is, Netflix used debt to finance their content investment. Apple uses iPhones and Amazon uses AWS and free home delivery.”
“Evan is right about the potential for ‘lifestyle bundles’”, says Jonathan Giegengack of Hub Research. “In fact I think they are inevitable: the epicenter of ‘subscription saturation’ may be in TV but it’s certainly not limited to that. People want fewer accounts and passwords and credit card transactions to manage, whatever the content. Providers that can streamline this have an advantage in the selection process. They’re also less vulnerable to churn: In our recent study on lifestyle bundles, we compared Prime Video users who also use Amazon Music and/or Prime Gaming with subs who only use Prime Video. Those in the first group are far more satisfied and engaged with Amazon as a source of entertainment, than those who only watch Prime Video. Vince Gilligan’s show by itself doesn’t make Apple TV+ a more attractive lifestyle bundle. But (besides cutting the price) flagship shows like this are the most effective way to generate new subscribers. Look at the subscriber boost that Paramount Plus got from 1883 and Halo, or that Peacock got from Yellowstone. And once those people are using one leg of the bundle, it’s fundamentally easier to get them to try the others. That first piece of destination content is critical, especially for a company like Apple which is not already perceived as a ‘bundler’ (the way Amazon is).”
Additionally, it is worth noting that Apple TV+ executives Jamie Erlicht and Zack Van Amburg likely helped to land the deal due to their longstanding professional relationship with Vince Gilligan. They were both formerly Sony Pictures Television presidents who were instrumental in greenlighting Breaking Bad and Better Call Saul. Additionally, Chris Parnell, former Sony Picture Studios co-president is now a senior programming executive at Apple TV+. While these professional connections to Gilligan likely helped to further seal the deal for this forthcoming project, Amazon is also rumored to have been a major bidder, which again underscores the flexibility of these global powerhouses to dominate the streaming market with both high-profile and programming acquisitions and the freedom to take risks on projects that are less of a safe bet.
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